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COVID-19: Home insurance and “pandemic pods”

August 22nd, 2020  |  Home

Parents with school-age children are jittery as schools prepare to re-open for the first time this September during the pandemic. The question for many parents is: Do we send them back or keep them home?

Some who are in favour of keeping them home to learn are setting up so-called “pandemic pods” to home-school small groups of children.

But some brokers are sounding the alarm that if parents hosting such pods in their home get sued because of the transmission of COVID-19, their homeowner policies may not cover the liability.

“To my Canadian contacts considering pandemic pods for home schooling, your homeowners’ insurance excludes liability coverage for claims arising from transmission of disease,” cautioned Brooke Hunter, president of Hunters International Insurance, in a post on LinkedIn. “You would be taking on forms of liability that won’t be insured. Call me if you’d like to discuss.”

A recent story by Global News describes a pandemic pod as inviting a small group of children — a pod — into the house to learn together. “The parents, on rotation, can educate the children, or they can pool together funds to hire a tutor or teacher,” the story said.

One Facebook group, Learning Pods Ontario Facebook, has been established to find families who may not be comfortable sending their children to school and are looking for other options, Global News reported.

Insurance implications

Hunter said she was speaking to one organization while arranging support for her youngest child who is in public school. “A company with whom I was talking said a majority of requests that they are getting right now is to come with teachers to facilitate a pandemic pod,” Hunter recalled of the conversation. “And they have declined because of the insurance implications.”

Several representative homeowner policies shared with Canadian Underwriter contain exclusions for illness or disease, including wording such as: “the transmission of any communicable or sexually transmitted disease, including Acquired Immune Deficiency Syndrome…by any person insured by this policy.”

“I’d say COVID is communicable, wouldn’t you?” Hunter asked of the policy language. She went on to say she didn’t know how liability for the novel coronavirus could be covered under the language of most exclusions in homeowner policies.

Another example, according to Canadian Underwriter, is a policy that says, “We do not cover personal injury or property damage resulting from any illness, sickness or disease transmitted intentionally or unintentionally by a covered person to anyone, or any consequence resulting from that illness, sickness or disease. We also do not cover any damages for personal injury resulting from the fear of contracting any sickness, illness or disease, or any consequence resulting from the fear of contracting any illness, sickness or disease.”

Such exclusions could apply to a myriad of situations, and not just the “pandemic pod,” as Hunter observed. For example, dinner parties during the pandemic may also fall under exclusions, as the provinces allow more people to gather together in private homes.

“Any decision to hold an event during the COVID-19 pandemic, no matter how large or small, should rely on a risk-based approach,” the World Health Organization (WHO) posted in a Q&A on its website recently. “WHO has provided guidance on how such a risk-based approach can be taken.

“This Q&A is focused on small, non-professional gatherings and events (i.e. birthday parties, children’s football games, family occasions). Precautions to consider include actions to prevent transmission between people, and where to hold the venue, and how it can be modified to make a safer environment. Cancelling a planned event is an option that should always be considered, especially in case of non-essential events or when precautions cannot be implemented or adequately communicated.”

Meanwhile, the National Alliance for Insurance Education and Research, a continuing education organization for 150,000 insurance professionals in the U.S. and worldwide, also warns there can be insurance implications and urges its members to have discussions with their clients. It says these risks are likely not top of mind for those parents who see pandemic pods as an alternative to regular schooling. The organization urges insurance professionals to have the discussion with their clients about coverage limits, gaps in insurance and liability before they make the commitment.

“For clients—namely teachers or tutors—providing pod services, coverage for exposures related to professional services is likely excluded from the homeowner’s policy, so have a conversation about the risks and how to minimize them,” its blog says. “Professional liability coverage may be needed.”

Bottom line? If you’re considering involvement with a pandemic pod and are unsure about your home insurance policy or your coverage as an educational professional, speak with your broker. They’ll be able to advise you about your exposure to risk and what options may be available.

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